Borouge seeks to lure plastics firms to Abu Dhabi

The petrochemical venture hopes to find more local customers to help absorb increased production from its planned expansion of facilities.

Hussain Lootah, Borouge's senior vice president for the Middle East, says the expansion will boost Abu Dhabi's economy. Randi Sokoloff / The National

Borouge, the Abu Dhabi Government's petrochemical joint venture, hopes to lure high-tech plastics manufacturing companies to the emirate.

The move is intended to help absorb increased production from the company's almost US$10 billion (Dh36.73bn) planned expansion of facilities.

It also aims to add new distribution centres near India's manufacturing hubs, said Hussain Lootah, Borouge's senior vice president for the Middle East.

Finding new markets within and outside the UAE will be increasingly important as Borouge proceeds with an expansion that it hopes will increase its specialised polymer production to 4.5 million tonnes by 2014. The company plans to target markets in South America, the Middle East, east Africa and Asia.

Distribution centres in India would add to those it has in Shanghai, Guangzhou and Singapore, and an export terminal the company is building in Ruwais in Abu Dhabi.

An increasing number of prospective plastics buyers at ArabPlast, an industry conference that opened yesterday at the Dubai International Convention and Exhibition Centre, are from India, said Craig Halgreen, a Borouge spokesman.

"We are planning to have more distribution hubs in India to stay close to our customers," Mr Lootah said.

Abu Dhabi Basic Industries Corporation (ADBIC) has been trying to recruit tenants for what it hopes will be the world's largest plastic conversion cluster, a 4.5 square kilometre manufacturing centre in Musaffah called Polymers Park. Borouge hopes to supply much of the materials those companies will require.

"There we will see the difference in the converters and growth in the GDP of Abu Dhabi," Mr Lootah said.

He did not say how much investment in Abu Dhabi's plastic conversion industry would be needed to absorb Borouge's planned additional stock.

Borouge and ADBIC are part of the emirate's overall strategy to diversify away from an oil-dependent economy and increase the domestic plastic industrial skill set. GDP calculations classify the petrochemical industry separately from the energy sector.

Borouge is a joint venture between the Abu Dhabi National Oil Company and the Austrian company Borealis. Borealis is 64 per cent owned by the Abu Dhabi Government's International Petroleum Investment Company.

Borouge aims to take advantage of Borealis's commercial ties and technical knowledge. Plans to export Borouge products to South America will make use of the Austrian company's existing market connections there. In India, the company hopes to win contracts with manufacturers of car components on the back of Borealis's work with Volkswagen and others.

Borouge now sends employees to train at the Borealis facilities in Austria. Many of the scientists hired to staff a $70 million research and development centre Borouge is building in Abu Dhabi will be provided by the Austrian company.

"At this stage, the expertise, the knowledge, is coming from Borealis," Mr Lootah said. "It's not a matter of relying, it's a matter of build-up."

Borouge is continuing to expand its footprint in China, which Mr Lootah was due to visit last night for a meeting this week.

Senior company officials are expected to inspect a compounding plant Borouge opened in Shanghai in April and aresearch and development centre at the facility, he said.

The company is focusing on developing products in concert with car makers in China.